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New York Hurricane Insurance: Fact File

AUGUST 2016

New York was one of over a dozen states impacted by Hurricane Sandy in October 2012. Sandy caused $18.75 billion in U.S. insured property losses, excluding flood insurance claims covered by the federal flood insurance program, according to estimates from ISO’s PCS unit. This would make Sandy the third most costly U.S. hurricane, after hurricanes Katrina and Andrew.

At $9.6 billion, New York suffered the largest private insurance losses from Sandy, followed by New Jersey with $6.3 billion, according to ISO.

New York was one of 14 states impacted by Hurricane Irene in August, 2011. Irene impacted a total of 14 states, causing a total of $4.3 billion in insured property damage, not including flood losses covered under the National Flood Insurance Program (NFIP), according to ISO. The NFIP puts its claims payouts from Irene at $1.3 billion (in all states).

Three of the costliest hurricanes to hit the U.S., based on insured property losses, caused damage in New York: Hurricane Ivan and Hurricane Frances, both in 2004, and Hurricane Sandy in 2012. (See chart below.)

The 1938 Great New England Hurricane of 1938 was one of the costliest storms to hit the area. The hurricane, which made landfall as a Category 3 storm during high tide along Long Island, New York and the Connecticut coast, caused extensive damage to those states as well as to Rhode Island and Massachusetts. The storm caused a total of 600 deaths, 1,700 injuries and over $400 million in damages, according to the Massachusetts Executive Office of Public Safety and Security. An analysis by Karen Clark and Company estimates that the storm would have caused $35 billion in insurance damages had it occurred under present conditions.

There were 188,202 flood insurance policies in New York in 2015. Standard homeowners policies typically do not cover flood damage. Flood insurance is covered by the National Flood Insurance Program.

The insured value of properties in coastal areas of New York totaled $2.9 trillion in 2013, accounting for 62 percent of the state’s total insured property exposure, according to an analysis by AIR Worldwide.

The population in New York’s coastal areas increased by 2.5 percent from 17.6 million in 2010 to 18.0 million in 2015, according to the U.S. Census Bureau, which also reports that two of the most intense U.S. hurricanes since 1960 affected coastal counties in New York: Hurricane Donna in 1960 and Hurricane Sandy in 2012.

New York has a residual market plan that acts as a market of last resort for residential and commercial property insurance in the state.

The New York Property Insurance Underwriting Association (NYPIUA) was formed in 1968 after passage by Congress of the Housing and Urban Development Act of 1968. This legislation made federal riot reinsurance available to those states that instituted such property insurance pools.

Exposure to loss under NYPIUA more than doubled to $13.4 billion in fiscal year 2015 from $5.6 billion in 1990, even as the plan’s policy count went down. The plan’s total policy count (habitational and commercial) was 51,297 in fiscal year 2015 compared with 73,805 total policies in 1990.

Top 10 Writers Of Commercial Insurance In New York By Direct Premiums Written, 2015 (1)

(1) Includes residential and commercial Gulf and East Coast properties, as of December 31, 2012. Ranked by value of total insured coastal property.
(2) Total exposure is an estimate of the actual total value of all property in the state that is insured or can be insured, including the full replacement value of structures and their contents, additional living expenses and the time value of business interruption coverage.